Shell could quit Niger Delta

ENVIRONMENTAL activists claim the latest outbreak of violence in Nigeria is simply the beginning of a civil war that could force Shell into a huge shake-up of its activities in the oil-rich country.

Shell has evacuated 235 staff from two oilfields as militants in the Niger Delta fight government troops. However, it claims to have managed to keep production at almost a million barrels a day.

But an escalation in violence would be likely to lead to a shutdown at a number of facilities, and would cast a shadow over the efforts of chairman Jeroen van der Veer to revive the business.

Campaigners in the UK believe the fighting is only likely to get worse, and will ultimately push Shell into quitting its onshore assets for new deepwater fields away from the trouble.

Lorne Stockman of research group Platform said: 'The situation in Nigeria is turning into civil war. Part of Shell's efforts to replace reserves is by increasing production in Nigeria, and it is quite remarkable how they have not even paid lip service to the threat onshore. They are not referring to the situation and not highlighting how it may affect production.

'Things could develop to the point that onshore production will become extremely difficult.'

Shell is the largest foreign operator in the country. Most of its output is from onshore sites in the Delta but it begins deepwater production next year at the 220,000-barrels-a-day Bonga field.

The group has played a major role in helping Nigeria pump out 2.5m barrels of oil a day but it has come under continuous fire from environmentalists for not doing enough to prevent oil spills, leaks and corruption.

Shell was slammed in the 1990s as the Delta's Ijaw and Ogoni tribes protested at the lack of oil money being reinvested in the region.

Shell's links with Nigeria reached a low point nine years ago when Greenpeace said the giant had blood on its hands after the government executed activist Ken Saro-Wiwa.

The Ijaw tribe have already vowed to widen the current uprising across the entire oil-producing region to force political reforms or gain sovereignty.

A spokesman said Shell was committed to its onshore assets. 'We have been producing in Nigeria for 50 years, through thick and thin, and we believe the country has a bright future,' he said.

Since Saro-Wiwa's death, Shell has sought to improve its relations with local communities in Nigeria but critics claim new schools and hospitals promised for the Delta remain unfinished.

It emerged last month that the company could face a $1.5bn (£830m) compensation bill for pollution.

An internal report commissioned by the group last December warned that the basis for protracted violence was 'rapidly being established'. It placed the conflict on a par with Chechnya.